Doesn't it feel like we've collectively just woken up from a long dream, where money fell from the sky, we didn't need to save anymore, we could buy anything we wanted anytime we wanted, and we could have any mansion our heart desired (thanks to no-down, no-doc, interest-only, teaser-rate loans)?
August 01, 2006
HousingPanic Stupid Question of the Day
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no? or is the answer yes?
I don't think a lot of Americans have woken up yet
But oh, will they.
My father in law in Northern San Deigo is so screwed. Taken money twice out on a piece of crap shack, 800 sf and falling down. He keeps talking about a epic remodel and cashing out and living on all that cash. Now he can't be bothered, hunting trips to make, toys to be bought and he's just tearing through the remaining money. He does construction so when it really starts to slow down that means less work for him which makes it harder to make those payments. I wish he had not taken those loans, but whats the bank thinking? That property is not worth anywhere near what he owes.
No. I, for one, have been renting the last 18 months and haven't been able to afford the huge ass SUVs, Ford Mustangs convertible, swimming pools and kitchen remodels that my wealthy neighbors have. In OC California, what you describe isn't a dream at all. People live it. They just buy the stuff they want as an "I'm rich"- reflex and don't appear to give it much thought. Sometimes I read this blog and think their will be a massive correction and a financial crisis here. But the reality may be that people really are rich enough in Orange County to weather even a housing shit storm. - ? We'll soon see.
I've just been reading the stories about people trying to dump their McMansions and finding no buyers. Now these people all say they want "lower maint, lower taxes and lower utils...".
I'm getting a picture in my mind of, say, 1975 when you could but a 1969 Dodge Monaco (anyone remember those huge square boxes that took up an entire parking space?) for $500 because they only got 8 mi/gal. "I want to get something with a little better gas mileage." DUH
Jens Parsson wrote about it 30 years ago in Dying of Money: Lessons of the Great German & American Inflations:
"Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular general prosperity, all in the midst of temporarily stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the latter effects, but the latter effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock markets, rising taxes, still larger government deficits, and still roaring money expansion, now accompanied by soaring prices and ineffectiveness of al traditional remedies. Everyone pays and no one benefits. That is the full cycle of every inflation."
Sounds familiar, doesn't it?
wait wait go back to sleep my pretty... my house is still on the market 260 days and counting I got to get out HELP HELP HELPPPPPPPP
"I'm getting a picture in my mind of, say, 1975 when you could but a 1969 Dodge Monaco (anyone remember those huge square boxes that took up an entire parking space?) for $500 because they only got 8 mi/gal. "I want to get something with a little better gas mileage." DUH"
I remember a story my dad told me of people giving away 66-69 V8 Mustangs during the 1979 & 1980 oil crisis. He said they were virtually worthless at the time. I can't help but think we are repeating the same mistake again as I read of people paying $700 a month for a new Suburban.
>>> I can't help but think we are repeating the same mistake again as I read of people paying $700 a month for a new Suburban
-- A property near to mine the owner made into a set of four illegal apartments (out of a single family) by carving up the house and the (heated) garage. One of the renters of 1/4 of this place (with room mate!) has a brand new Escalade. I bet my wife its a 100% financing job, she thinks the guy is "rich" and saving his money by renting....
>>> $700 suburbans
I believe I read this last year on the FB blog. A car dealer posted that he owned a GMC and a Cadillac dealer, and the GMC buyers were the "real" rich and paid cash for their GMC's, but the Escalade buyers were always 100% financing *and* had an underwater trade-in to boot that got rolled into the new loan.
>>> Escalades
Escalades have a certain "demographic" associated with them. I can give GM credit from taking a brand whose buyer was an average age of 72, and introducing a bunch of 20-somethings in the "RAP" community to get the average age down to 59.
The Escalade is their biggest selling model. I have a Tahoe, and can afford an Escalade, but won't touch one due to the demographic.
(Like I am going to wear a basketball jersey as big as a dress...)
Poppies...Poppies...Sleep...Sleep.
And that was right before they hit the Emerald City. And not too long before they find out who is behind the curtain.
Why it's Mr. Swann from Phoenix.
There's way too much Californication going on with housing.
I've never owned property, so no I don't feel like I woke up from a dream. I was advised to "get a foot in the door" by purchasing anything I could afford last year, but I declined hoping this hype would die down; it did!
I'm still renting, while being totally care-free. I'm hoping for a 40-50% drop here in Tampa Bay Florida.
-Dragasoni-
I bought pre-bubble,just at the rise to be exact in 2003. 100% precnet financing and only paid closing costs. Paid $227k at 5.375 rate for 30 years. My payment is 1400. A nice 2 story 1900 sq ft house built in 94'in Southern California. I timed it just right. Don't wake me, I am still on cloud 9!! Muahahahahaha!!!
My cousin owned a gold and black 1970 Ford Mustang Boss. I remember that it sucked premium leaded gasoline. Mmmmmm, baby, that thing was a mechanical stampede. And the fumes - no wonder I'm mentally retarded.
It's called ENTITLEMENT
You know..we're Americans, so we're ENTITLED
we're the best, so we get everything
just ask our politicians..they never tell us anything else...don't need to save, conserve or anything else that is..you know...HARD WORK..
countries full of bozos elect bozos to run their country
but no problem...we're ENTITLED to have it all anyway!
I've never seen money fall from the sky. I've always worked, in my younger days three jobs-AF full time and two part time jobs so I could become finacially secure. When I was stationed at McDill in Tampa I bought a ghetto house for $23,000. It was 3200 sq ft built in 1905 in a 95% black neighborhood. I drove a nissan, stick shift, no A/C, no power windows etc, good gas mileage. I saved my money but compared to some of my air force buds didn't feel frugal. One guy, a Master Sergeant from the Phillipines had been in the AF 23 years and still lived in the dorm! All his money went into stocks and $500 a month went to his family in the PI. He didn't even own a car! He ate all his meals on base, didn't pay rent or electric, gas, car insurance etc. I was impressed. He was wealthy and 43 (this was in 1976) and planned on returning to the PI with all his savings, stocks, and pension.
Nobody I know has ever seen money fall from the sky. My dad always said, "If you can't afford to loose it, you don't spend it." I believe at least 1/2 of America lives by those rules and since most of the people I personally know do I don't see many living beyond their means or their incomes.
Those who are credit slaves? I can't totally blame them. It is easy for a lot of people to take the path of least resistance. How else do the super rich get to live for free? If they didn't lend their money out at 18% to the lower class they all might have to go back to work.
Money falling from the sky! How absolutely ridiculous! Don't be stupid! I just go into my backyard and pick some from my money tree!
Hey, you have a great blog here! I'm definitely going to bookmark you!
I have a american car sales statistics site.
Come and check it out if you get time :-)
Greetings.
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